Top 5 Finance Challenges of 2023
There’s no doubt that Finance is one of the most critical and challenging sectors to work in. Tasked with managing an organization’s financial status, strategy, and analyzing the business environment, professionals in the industry must maintain accuracy while struggling with outdated, manual processes, rapid digitization, and swiftly changing regulations.
2023 has been a unique year for Finance–although organizations celebrated recovery from the COVID-19 pandemic last year, their celebrations were short-lived. This year, companies worldwide find themselves navigating constant market uncertainty, needing to accomplish more with less resources, and preparing for a potential recession.
Recently, insightsoftware teamed up with Hanover Research to understand the finance trends and challenges that are impacting Finance the most in 2023. The study found finance teams to be under pressure from both inside and outside their organizations–squeezed on one side by a tight labor market, inflation, and high interest rates and on the other by expanding responsibilities, over-reliance on IT, and data inaccuracies.
Here, we discuss the top five challenges facing finance teams and how to mitigate them.
Challenge 1: Budgetary restraints
Due to market uncertainty, businesses are treating their budgets with more scrutiny. Preparing for a possible recession means leadership often reduces budgets. Having less of a budget to work with makes it more difficult for finance professionals to accomplish regular tasks while putting them in a position where they must find ways of doing more with less.
Counter-intuitively, reduced budgets often mean more work for finance teams. There are usually increased requests for reporting across cash flow, operational inefficiencies, and continuous planning. When finance team hours are already maxed out, reduced budgets also mean they’re less likely to be able to hire or bring in outside help.
When your team isn’t able to fit outsourcing and additional hiring into the budget, technology can help to save time by giving everyone on your team the tools they need to accomplish tasks more quickly. Instead of pushing through time-consuming manual processes, lean on technology to enable your teams to rapidly generate and distribute accurate reports. You can stay on budget while ensuring your teams can better navigate essential tasks.
2023 Finance Team Trends Report
Download NowChallenge 2: Raised prices
One major challenge global finance teams face this year is raised prices. When prices go up, organizations are forced to step back and evaluate what they must cut back on. The more prices go up, the fewer “easy cuts” there are to make. Eventually, teams are reduced to only the essential resources, and left to figure out how to achieve success with the bare minimum support. According to the study, finance teams are less efficient at 100% of recurring tasks in 2023 than they were last year.
For greater efficiency that will stretch your dollar further, consider finding a finance tech solution that fits with your organization’s unique needs. By streamlining complicated manual processes and making it easier for your staff to manage workloads, you’ll be able to keep costs down in the long run.
Challenge 3: Lack of skills in team
With an aging workforce heading into retirement and less qualified graduates, finance teams are scrambling to maintain the talent they have while bringing new hires up to speed. When a skilled employee walks out the door, the knowledge leaves with them.
Organizations have been approaching growth with cautious optimism – according to this year’s survey, the number of businesses expecting to grow within the next two years dropped from 73% in 2022 to 64% in 2023. This leaves finance teams grappling with skills shortages. With 89% of organizations facing challenges finding skilled finance talent, and 75% of the CPA workforce approaching retirement age, finance teams are forced to be more efficient with the staff they already have.
While many finance teams are making strides to balance workloads with existing staff, it isn’t enough to bridge the skills gap. With the right technology, you can train new hires more quickly while relieving understaffed departments from repetitive work. When searching for a solution, seek one that’s user-friendly and doesn’t require complex technical knowledge. That way, your team can accomplish more in less time with the skills they already have.
Challenge 4: Manual and time-consuming processes
To keep up with swiftly changing market conditions, finance teams must find ways to be more resourceful. With less people on staff, they spend more time generating reports. According to insightsoftware and Hanover Research’s report, teams spent 3% more time than they did last year on financial statements, 3% more time on budgeting and forecasting, and 4% more time managing payables. And In spite of efforts to train existing workers and encourage collaboration, finance teams in 2023 are about 4%-5% less efficient than they were last year.
Repetitive manual tasks consume a significant amount of time for finance professionals. Efficiency challenges indicate that there are other steps required for organizations to reach a point where they can streamline repetitive workflows and free up time for future planning. Adopting new technology can help bridge those gaps, but it doesn’t rank high on finance teams’ priorities. In fact, there has been a decrease in the priority of task automation from 40% in 2022 to 25% in 2023.
An informed investment in automating manual processes will allow organizations to free up time for analysis while increasing job satisfaction for existing team members. By working with the right software, finance decision-makers can increase their efficiency while freeing up time to gain a forward-looking lens.
Challenge 5: Data limitations and inaccuracies
Data inaccuracies arise due to several factors, for example manual data input and out-of-date information. It can also be the result of manual reporting–exporting information onto static spreadsheets. Although the data is likely accurate, it lacks the detail and organized format that can answer questions for key decision-makers.
According to insightsoftware and Hanover Research’s 2023 report on operational reporting, 98% of respondents distribute reports via a static PDF, and 95% generate either all or mostly static reports.
Static reports don’t provide access to real-time or refreshable data to drill down on details or answer important organizational questions. In a time defined by market uncertainty, this could mean key details are outdated by the time the recipient opens the PDF. Leaders rely on up-to-date information to gauge the health of the business, and static reporting fails to provide them with the timely data they need to make crucial decisions.
ERPs come with a plethora of benefits out of the box. They link and organize an organization’s data while providing out-of-the-box reporting capabilities, relieving teams from manually dumping data into a spreadsheet. However, these processes are rigid, and can’t cover every business need.
With requests for time-critical reports increasing, you and your leaders need data that is not only reliable but also up-to-the-minute. With a reporting solution that leverages real-time data, your organization is empowered to make informed decisions with absolute confidence, effectively steering the company towards success.
It’s no secret that 2023 has come with its fair share of challenges as teams face strain from global market slumps and within their own organizations. But with the help of a solution that offers features like self-service reporting and real-time or near-real time data, you can overcome hurdles more easily, save time, and increase efficiency. Ready to eliminate Finance challenges? Schedule a demo today.
The State Of Operational Reporting in 2023
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